"Request for National Subsidy to Compensate Losses from Free Rides on Urban Railways"

6 Cities Adopt Joint Proposal of 'National Urban Railway Operating Local Governments Council'
Fare Evasion Losses Beyond Local Governments' Capacity... Urging Magnanimous Decision

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Voices are growing for national government compensation for legal fare evasion losses in urban rail transit. Considering the snowballing accumulated losses and the lack of prospects for improvement, the main point is that a grand decision by the government is necessary. Currently, the fare evasion losses are borne by local governments.

According to Daejeon City on the 4th, the “National Urban Rail Transit Operating Local Governments Council (hereinafter the Council),” composed of six special and metropolitan cities including Daejeon, Seoul, Busan, Daegu, Incheon, and Gwangju, adopted a joint petition urging national government compensation for legal fare evasion losses in urban rail transit.

The joint petition includes requests for the enactment within the year of related legislation to establish the legal basis for government loss compensation, such as amendments to the “Urban Rail Transit Act,” and requests for national government budget support for urban rail transit. It will be delivered to the government, the National Assembly, and representatives of each political party.

Previously, in 1984, the government introduced the urban rail transit fare evasion system with the purpose of guaranteeing universal mobility rights for the elderly, disabled, and veterans. Now, 37 years later, it has become a representative national transportation welfare policy in South Korea.

However, the current structure, in which local governments and urban rail transit operators must fully bear the losses caused by fare evasion without government financial support, creates a mixed outcome for the system. This is because local governments face limitations in absorbing the losses due to their financial conditions.

For example, from 2016 to 2020, the six special and metropolitan cities operating urban rail transit, including Daejeon, recorded an average annual net loss of 1.164 trillion KRW, of which the net loss from fare evasion accounted for 554.2 billion KRW (47.6%).

The accumulated deficits of urban rail transit operators by region are estimated at 16.5441 trillion KRW in Seoul, 2.0726 trillion KRW in Busan, 1.6323 trillion KRW in Daegu, 1.6094 trillion KRW in Incheon, 620.9 billion KRW in Gwangju, and 677.4 billion KRW in Daejeon.

The problem is that as the elderly population, the beneficiaries of the fare evasion system, rapidly increases nationwide, the scale of losses that these local governments must bear could grow even larger. Statistics Korea forecasts that the proportion of the elderly population aged 65 and over nationwide (relative to the total population) will rise from 16% this year to 20% in 2025 and 40% in 2050.

Moreover, considering the years-long freeze on urban rail transit fares, the decrease in subway ridership due to the prolonged COVID-19 pandemic, and reinvestment demands for aging facilities such as electric trains, the Council argues that local governments have reached a critical point in bearing losses under the current free transportation system.

The Council stated, “Urban rail transit is a public service performed by the state, and fare evasion is a type of welfare system guaranteed by law. However, shifting the losses caused by fare evasion onto urban rail transit operators and local governments has now reached an unsustainable level.”

It also emphasized, “The Council agrees that resolving financial issues is urgent to ensure the sustainable operation of urban rail transit and recommends that the government, which introduced and benefits from the legal fare evasion system, compensate for the losses caused by legal fare evasion.”

Jeon Jae-hyun, Head of the Tram Metropolitan Headquarters of Daejeon City, said, “Local governments operating subways are fully bearing the deficits caused by fare evasion, threatening the stable operation of urban rail transit,” and urged, “We call on the government and the National Assembly to make a grand decision so that the subway, the lifeline for ordinary citizens, can operate safely without suspension.”

Meanwhile, last year during the regular session of the National Assembly, members of the Land, Infrastructure and Transport Committee advocated for the passage of amendments to the “Urban Rail Transit Act” focusing on support for fare evasion losses. However, the Ministry of Strategy and Finance opposed it citing support for autonomous affairs and national treasury burdens, leaving the urban rail transit amendment bill stalled in the National Assembly.

This content was produced with the assistance of AI translation services.